Hong Kong Monetary Authority (HKMA) to Issue First Stablecoin Licences in March

Hong Kong regulators are preparing to approve initial stablecoin licenses in March.

The Hong Kong Monetary Authority (HKMA) confirmed the review process after receiving applications from 36 institutions seeking stablecoin licenses.

Officials plan to open a regulated market phase following earlier testing while keeping approvals limited in the first licensing round.

The HKMA Chief Executive, Eddie Yue, told lawmakers on Monday that only a “very small number” of applicants will receive approval, as the review focuses on legal readiness and financial protections. 

Key Takeaways

• Hong Kong plans first stablecoin licence approvals in March under newly enacted regulatory law.
• Only a small number of applicants will gain approval as regulators apply cautious oversight.
• Reviews focus on legal readiness, reserve backing, risk systems, and protection of user funds.
• Further approvals could follow later if initial licensed issuers operate smoothly and safely.
• Limited early licences may concentrate market activity among banks and financially strong firms.

Licensing Framework Shifts Toward Supervised Market

The licensing framework aligns with the implementation of the Stablecoins Ordinance in 2025.

The law took effect on August 1, 2025. From that date onward, issuing fiat-referenced stablecoins requires formal approval from regulators.

Authorities aim to protect users while maintaining strict oversight of payment activities and reserve management.

The Hong Kong government launched a stablecoin sandbox in 2024 and invited three participants to take part in testing: Jingdong Coinlink Technology Hong Kong Limited and RD InnoTech Limited formed the first testing group.

• The second group included Standard Chartered Bank Hong Kong Limited, Animoca Brands Limited, and Hong Kong Telecommunications Limited.

Yue said many applications lacked sufficient detail. The HKMA requested additional information from several firms.

Authorities want clear explanations of real-world use cases. Risk systems, reserve structures, and fund controls remain central to the evaluation before any licensing decision.

HKMA Focuses On Reserves And Risk Controls

Hong Kong regulators require full clarity on the asset backing of each stablecoin. The HKMA reviews reserve quality and redemption processes.

Firms seeking stablecoin licenses must keep user funds separate and demonstrate strong liquidity planning. 

Hong Kong officials want clear proof of operational resilience. Money flow management and compliance controls are a priority.

Anti-money laundering systems also receive close attention. Lessons from overseas failures have shaped the strict approach. HKMA aims to prevent instability during the early stages of licensed issuance.

Early approvals may shape market access. Banks and payment providers tend to prefer licensed partners. Limited approvals could concentrate activity among approved issuers.

Smaller firms may struggle to meet capital and reserve requirements during the early licensing period.

Market Impact And Next Regulatory Steps

Ant International signaled plans to apply once procedures are unlocked, signaling early intent.

A joint venture between Standard Chartered, Animoca, and HKT is also prepared to submit an application. Competition remains tough across applicants. Approval numbers, however, will stay capped during the initial phase.

Licensed issuers must comply with Hong Kong rules for cross-border transactions.

Yue mentioned that mutual recognition discussions may take place later. The initial focus remains on the domestic market. Authorities want measured growth without putting financial stability across payment networks at risk. 

The March launch may influence regional stablecoin policy, as authorities balance ambition with caution in shaping the regulatory approach.

If the initial licenses operate smoothly, further approvals may be granted later in the year. The policy aims to promote trust, order, and controlled growth across digital finance markets.

Conclusion

Hong Kong stands at a regulatory turning point for stablecoins.

Stablecoin licenses' approvals in March are expected to introduce an authorized market after years of planning and testing.

Strict reviews, limited approvals, and strong protections are designed to protect users while allowing controlled growth under clear legal oversight.

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FAQs

1. What is Hong Kong planning regarding stablecoins?

Hong Kong plans to issue its first stablecoin licences under a new regulated legal system.

2. Why is Hong Kong limiting early stablecoin approvals?

Authorities want to reduce financial risk and ensure market stability from the start.

3. How many companies applied for stablecoin licences?

Around thirty-six institutions submitted applications to receive stablecoin operating licences.

4. Will more stablecoin licences be issued later?

Yes, more approvals may follow if early licensed issuers operate safely and smoothly.

Disclaimer:
This content is provided for informational and educational purposes only and does not constitute financial, investment, legal, or tax advice; no material herein should be interpreted as a recommendation, endorsement, or solicitation to buy or sell any financial instrument, and readers should conduct their own independent research or consult a qualified professional.